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Human Resource management (HRM) is the function within an organization that deals with issues relating to people such as administration, training, hiring, safety, employee motivation, development of organization, performance management etc., "Human Resource Management involves all management decisions and practices that directly affect or influence the people or human resources who work for the organisations". (Fisher et al 2003).
Companies who are working hard to fulfill the needs of their employees to get the best out of them and to create a working atmosphere in the organisation which is conducive to productivity, this is being achieved by human resource management who are able to plan the needs of employees by thinking ahead which help improve the rate of skilled workforce who at the end choose to remain working for a company. HRM plays a very important role in managing, controlling, developing and maintaining the workforce which significantly contribute to the profitability of the organisation. In most of the organisations, there is human resource departments, which are again distributed into two sections depending on the type of functions and responsibility they carry out. The first one is HR administration which is actually responsible for taking care of the employees with work related problems. Whereas, the second one is responsible for taking care of recruitment functions, employee training and making them well-equipped with 'tools of the trade' etc. In this way, they handle most of the functions in an organisation as a result the top management highly depends on them.
Strategic human resource management (SHRM) is a branch in the field of human resource management. SHRM deals with utilization of human resource in such a way that it enables an organisation to leap long term benefits, in terms of profits, core competence and other goals. Strategic human resource management is necessary in both small and large companies, the benefits of having SHRM are.
It helps to keep a check on whether the expectations of employees are being taken a proper care and issues are addressed properly.
It helps in future forecasting and have a vision of the future growth of a firm.
It keeps the employees up to date about the changes in cooperate world.
It helps underlining the strengths and weakness of the company and thereby helps management to take proper measures.
It helps in employee motivation..
Limitations of strategic HRM-
Issues may arise over the authority which ultimately results in conflict among the employees.
The changes that take place in market which creates pressure on the effective implementation of strategic HRM.
Problems may arise if the structure of organisation changes.
Conflicts among the senior management over implementation of new HR policies.
Strategic HRM is essential in both large and small organisations. In larger organisations, they have a large separate department in charge of human resource and development and whereas in small companies, this may be as simple as a manager taking a little time every day to observe, assist and assess employees and provide regular reviews. By meeting the needs of the employees in a way that also benefits the company, it is possible to improve the quality of staff members. All the efforts should be made by the companies to provide employees the tools they need to thrive is worth the investment and I implemented efficiently. Strategic human resource management helps in improving the productivity of employees and utilizing their expertise in achieving the organizations goals.
Strategic HRM v/s Personnel Management:
In earlier times, the personnel manager of a firm was the person in charge of ensuring employee welfare and used to act as a mediator between the management and the employees. He is the head of personnel department. Personnel manager performs both managerial and operative functions of management.
The functions of personnel management are,
Man power planning
Training and development.
In recent times, the term personnel management has been replaced with human resource management and Strategic HRM is the branch in the field of HRM.
It is a traditional term; it deals with workforce which includes selection, recruitment, staffing, payroll and administrative tasks.
It is that branch of management which must function in compliance with employment laws and it is usually considered as an independent function of an organization.
Personnel management carries a range of activities that are to do with managing the workforce rather than resources.
The job is more administrative in nature.
Personnel manager's main job is to ensure that the needs of the workforce are taken care properly.
Personnel managers play the role of mediators between the employees and the management.
Human Resource is recognized as much broader in scope than personnel management.
In recent decades, it has been more resource centric.
The primary concern is that the management objectives are fulfilled and at the same time ensuring that the needs of the employees are taken care of.
Strategic HRM involves managing the ongoing strategies and at the same time developing workforce.
From the above points it is clear that whatever the differences are, after all it is all about 'managing people'.
Leadership and Management:
Leadership is an art of motivating a group of people to act towards achieving a common goal. Leadership possesses the combination of personality and skills, which makes others to follow their directions. For an organization to excel, leadership is vital. A leader is someone who sets the directions and inspires other people, and influence others in the meetings or when making decisions. "Leadership at work is a dynamic process whereby one individual in a group is not only responsible for the group's results, but actively seeks the collaboration and commitment of all the group members in achieving group goals in a particular context and against the background of a particular national culture"(Cole 2004).
A manager who is also a leader is an asset to organisation, he must have traits of a leader, i.e., he must possess leadership qualities. Leadership management is nothing but using of leadership skills in management position. Leadership and management are the terms often considered synonymous. It is essential to understand that leadership is an essential part of effective management. However, by combining the two roles leader and manager, it is possible to inspire employees to overcome challenges and increase productivity, thus getting the quality work done. "Management and leadership are not mutually exclusive; in fact leadership is the highest component of management" (Covey 1992). Human Resource Management helps support managers to keep the employees motivated, improve their performance and ultimately achieve organisations goals. Human resource management takes every step to foster a work environment where employees are self-driven to perform their job tasks at a level that meet or exceeds management standards.
All leaders do not have same thinking or same perspective towards things. They have their own style of approaching issues and solving them. Thus, all of the leaders do not get the things done in the same manner. The leadership style varies depending on what kind of people he is dealing and interacting with. A perfect leadership style is one which gets the best out of the people and makes them follow him. Some important leadership styles;
Autocratic style: A leader who has a complete command and hold over their team. Here a leader tells employees what to do and how to do it, the team cannot put forward their views, criticize or question the leader's way of getting things done.
Democratic style: In this style of leadership, the leaders invite and encourage the members to play a role in decision-making process. The leader guides the employees on how to perform and what to perform, and even they have the opportunity to contribute ideas to the decision.
The Laisse Faire style: Derived from the French meaning 'leave alone', this is a loose leadership style. Here, the leader totally trusts their employees to perform the job themselves. This leadership style works only when the employees are skilled, loyal and experienced.
Leaders versus Managers
Managers do things right.
Leaders do the right things.
A person becomes manager by virtue of his position.
A person becomes leader on the basis of his personal qualities.
All managers are leaders.
All leaders cannot be managers.
A Manager performs all five functions of management.
Leaders influence people to work willingly for group objectives.
A Managers main concern is organizations goals.
A Leaders concern is group goals and employees satisfaction.
Managers create stability.
Leaders create change.
Controlling and problem solving.
Motivating and inspiring people.
The organisations which are not performing upto the set mark. Management accompanied by leadership sets new directions and makes use of available resources efficiently to achieve the set goals.
Leadership motivation Theory X and Theory Y- Douglas McGregor 1960.
The Motivation theory X and theory Y, these theories assume that the key leadership qualities are to organize people and resources, to best benefit the organisation.
Motivation Theory X-
The assumption made by a theory x manager are,
Here, a manager tells employees what to do and supervises their work. This reflects an autocratic style.
The employees have capacity for creativity in solving Organisational problems.
Most of the employees feel that the work is distasteful, and may even avoid work whenever possible.
The Primary source of employee motivation is money and security.
Motivation occurs only at the physiological and security level of Maslow's hierarchy of needs.
Motivation Theory Y-
In contrast to theory X, a theory Y manager makes the following assumptions.
Here, a manager believes that employees want to do well. The manager individually provides the opportunity to take control of their work so that they can contribute towards problem solving. This helps motivate them to do better and this reflects Democratic style of leadership.
Employees will commit themselves to achieve the organizational objectives only if it is beneficial to them.
If conditions are favorable, both physical and mental work can be as happy as playing.
Culture and Employee engagement:
Employee engagement is something the employee has to offer. An engaged employee is a person who is inspired, committed, enthusiastic and fully involved in their work. The benefits of having a engaged employee in organisation is that the company performs better, sustains long term success, displays innovativeness and ultimately becomes an attractive place to work. Walton says that "unless people eel fully engaged with an organisation, they will not be intellectually and emotionally committed or motivated to give their best willingly". And after streamlining and outsourcing in recent years will the companies still except the same commitment from their employees because the more they downsize and outsource, the less committed employees appear and the more they are breaking the psychological contract. (Altman, Cooper and Garner 1999).
Psychological contract: This is not a written document but implies a list of mutual expectations and satisfactions of needs arising from the individual-organisation relationship. This is not a part of any formal agreement but it covers a range of expectations, rights, duties and obligations that have a greater influence on the behavior. And 'If the psychological contract is broken, there are numerous impacts. It has a negative impact on job satisfactions, employee engagement and a negative impact on the commitment of the employees as well' (CIPD). Mullins 2010 states that the companies must find new ways to increase loyalty and commitment of employer by rewarding them, recognition to their contribution, better training and development, training of managers Etc.
Employee motivation and satisfaction:
Employees are the building blocks of an organisation. Organisations success depends on the collective efforts put by the employees in achieving company's goals. If the employees are motivated, they contribute a lot towards the organizational growth.
Applying Maslow's Hierarchy of needs theory:
Abraham Maslow proposed the hierarchy of need theory in 1943. This theory is about human motivation and is based on the assumption that there is a hierarchy of five needs within each individual.
Physiological Needs: These are the basic needs like food, water, sex, sleep. Here, the manager should give employees enough pay to purchase the basic needs and a pleasant working condition to work in.
Safety Needs: Includes safety, environmental and emotional security, protection etc. Here the employers should provide their employees with job security, retirement benefits, safe and hygienic working conditions.
Social Needs: Include the need for love, affection, care and belongingness. These can be achieved by the management by encouraging teamwork and by organizing social events.
Esteem Needs: Includes self-esteem, respect, attention, prestige, status. The managers should appreciate their employers with rewards on achieving the targets.
Self-actualisation: Includes growth, advancement, creativity and desire for gaining more knowledge. The self-actualisation needs are not fully satisfiable as they keep on cropping up continuously.
The Managers duty is to identify the employees need at the level which they exits and then those needs can be utilized as push for motivation and by doing this an organizational performance can be improved.
Organisational Success and Goals:
Success is something for which most organisations, large or small, strive. Small organisations want to get big and big organisations want to get bigger. An organisations success largely depends on the achievement of its goals. The HRM concept and its ways help organisations meet their goals. A HR Department must be viewed as a vital organ for an organizational success. The achievement of organizational goals can be evaluated by HR tools example. Investors in People (IIP), The European Foundation For quality Management (EQFM), Total Quality Management(TQM).
Total quality management (TQM): It is a method used to enhance quality and productivity in an organisation. It is a Japanese inspired way of life for an organisations committed to total customer satisfaction. It is a system which works in organisation particularly business; it involves all departments and employees, and even extending to suppliers and clients. HR has an important role to play in understanding the application of TQM methods and its tools and then applying those at all levels starting from top to bottom level of management.
HRM should ensure the effective use of employees and provide better returns to the organizations. A HR professional must be up to date with all the plans and strategies in order to meet the changing needs of the organisation and the global corporate world. A HR should be thorough with all the basic functions of HRM including organizing, planning and controlling human resource. HRM does help companies to reduce the risk and at the same time adding value to the organisations. A HR professional can add the greatest amount of value whilst they are involved in the early stages of strategy formulation. I think, the main concentration of HRM should not be upon risk reduction aspects of their policies, but at the same time adding value to the organisation too. HRM is an important management resource, it should be involved at all the levels of the decision making process and if executed properly, will result in the success of the business.